Monday, I made a suggestion the TEA Parties of Georgia take up the cause of SB 160, and perhaps take issue with Senator Don Balfour’s (R-Georgia Power) claim that Georgia’s current law prohibiting regulated utilities from donating to him directly was “blatantly unconstitutional.”

Happy am I to have just received the following press release in my in-box:

“This bill would greatly increase the influence of utilities that have state-created monopolies,” said Danny Orrock, Deputy Director of Georgia Watch, a member of the Alliance. “The state already gives them a monopoly and the power to take a citizen’s land through eminent domain. An entity that wields such significant power should not be allowed to play in elections.”

As far as the unconstitutionality of the current Georgia law, Emmet Bondurant, local attorney and Board member of Common Cause Georgia states:

“Citizens United held that corporations and unions have a First Amendment right to use treasury funds to pay for television or print ads or direct mail advocating the election or defeat of a candidate of public office, so long as those expenditures are made independently of and not in coordination with the candidate or his or her political campaigns (i.e. a First Amendment right to make “independent expenditures”).

Citizens United did not hold unconstitutional the Federal Corrupt Practices act that has, since 1907, prohibited corporations and national banks, and since 1947 has also prohibited unions, from making political contributions directly to a candidate or his or her campaign.

Nor did Citizens United hold federal or state laws that place monetary limits on the amounts that individuals, or PACS can contribute directly to a candidate or his campaign.

The Court in Citizens United maintained and preserved the fundamental distinction between laws that prohibit or limit contributions directly to candidates because of the tendency of such contributions to influence and corrupt candidates, and the right of individuals or corporations to spend their own money, independently of a candidate or a political campaign, to publish a newspaper or TV ad urging the election or defeat of a candidate.

Statutes in the first category are still valid after Citizens United. Statutes in the latter category are not.”

The members of the Alliance are independent groups and individuals with other policy interests in addition to their ethics proposal. However, they are united in the push for strengthening Georgia’s ethics laws. The Alliance includes Common Cause Georgia, Georgia Tea Party Patriots, Georgia Watch and the League of Women Voters of Georgia. They invite all groups and individuals with an interest in ethics legislation to join the Alliance at www.GeorgiaEthicsReform.com

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“An entity that wields such significant power should not be allowed to play in elections”

I honestly don’t know if it’s unconstitutional to deny a utility the right to participate in the campaign process while other corporations can contribute to campaigns. The utility is a monopoly, so I suppose that’s how they would be distinguished. Should ATT be denied the right to participate in campaigns, while Comcast can?

What I do know is the 1st Amendment was created for political free speech and I certainly wouldn’t trivialize it by referring to it as “not allowing them to play in elections.” The Supreme Court may “see” a right to “independent expenditures,” but it’s not explicitly mentioned.

I sure hope Balfour gets this one stuffed back down his exceedingly jowly throat. That’s all we need, Balfour on the take directly from GA Power.

And Macho, “playing in elections” is probably an apt term here. After all, if this bill is enacted, Balfour and his ilk would be nothing more than puppets having their strings pulled by their handlers.

To the Honorable State Representatives and Senators of the State of Georgia,

When you think of sunsetting departments to save money in the State Government, please consider the Public Service Commission (PSC). Please consider eliminating the PSC and STOP Senate Bill 160; Elections, public utility corporations, political campaigns.

As stated on the PSC website;

The mission of the Georgia Public Service Commission is to exercise its authority and influence to ensure that consumers receive safe, reliable and reasonably priced telecommunications, transportation, electric and natural gas services from financially viable and technically competent companies.

In the real world the only entities that can ensure safe and reliable services are those entities that are in the business to make a profit and capture market share. Likewise, the only entity that could limit the profits of these service companies is the state government. Lastly, the decision on what is a viable and technically competent service company should not be made by the state government.

The PSC was created by the State government to oversee monopolistic public services companies, but in reality the PSC enables those monopolies at the expense of the consumer. I understand at some point in the past there was a public outcry about rate increases from monopolistic companies serving the public. But, in reality the PSC is transferring wealth from consumers into pet projects for favored constituencies and politicians.

The PSC allows these companies to raise rates on consumers to maintain their profit margins. The companies are made whole, but the consumer pays higher rates. The PSC determines whether new entrants are viable and technically competent to enter our markets allowing competition. Why then are they still overseeing monopolistic public companies? There should be more competitors. The answer is simple, if they allow competition then there would be no need for the PSC. The consumers have few choices and pay higher rates precisely because the PSC enables these companies to exist without real competition.

The PSC, State government and these companies are really one-in-the-same entity by an incestuous relationship. The State government mandates that these companies put a piece of their profits into a fund overseen by the PSC. The PSC then sloshes that money throughout the bureaucracy and it authorizes projects on behalf of these companies. If these PSC bureaucrats do well by these companies they could be offered large salaried jobs when their public service is completed. The companies are willing participants for a good reason too; it is a mutually beneficial relationship. They could care less if they invest in this fund, provided they are allowed to raise rates to maintain their profit margins. The PSC allows the increase transferring the real money in the fund to the government at the expense of the consumer. The companies prefer the government spend their new found money on projects, because it keeps them from having to take business risks. The PSC returns a lessor percentage of that dollar for these projects.

These projects being authorized are not private sector entrepreneurial wealth creating ideas, otherwise entrepreneurs would engage in those projects. Whenever the government recommends expending money it always causes malinvestment. The only way to create wealth is in the private sector when savings are successfully invested by entrepreneurs that envision a profit.

I’ve had a running discussion with Tim Echols, PSC Commissioner. Tim’s new idea is natural gas powered vehicles. This is a good idea if people want to convert their vehicles to run on natural gas, but it’s bad business to fund the infrastructure with government money. Mr. Echols believes taking money from the PSC fund to build this infrastructure is a good idea from an economic standpoint. Nothing could be farther from the truth. First off, taking profits from the energy companies, sloshing it around the government, and returning a lesser percentage of the original dollar on projects is the very essence of destruction of wealth. The profits earned by the energy companies were squandered in the bureaucracy of the PSC. Second, when the government authorizes the spending of those funds on projects it is by definition malinvestment. The PSC should allow this gas company to keep all of their profits and make the decision in a free market to invest in this project. If they see value then they will put at risk their savings and wealth. If the projects have real economic value, competition will result as entrepreneurs rush-in to capture market share. Provided the PSC allows them to enter the market.

The last character in this play is the politician in the state legislature that will enable the energy companies to satisfy their customers. For example, let’s say UPS wants to convert all their trucks in Georgia to natural gas. This would save tens of millions of dollars in fuel and maintenance costs per year. But, UPS does not want to invest in a project like this to build the infrastructure. Since the gas company is already intertwined in this incestuous relationship with the government, they can influence politicians and PSC bureaucrats to fund this project. They could care less if it’s malinvestment with no real economic value; it’s not their money.

State Senator Don Balfour (R-9) wants to allow these companies to donate to campaigns. (See Senate Bill 160) Let’s think about this a little more …. The companies are already close with many of the state politicians and bureaucrats in the PSC. If the companies have a pet project that they want completed, they would prefer to get government funding because there is no risk on their part. What better way to get much needed funding than to donate to a favorite politician that will work to get a Bill passed authorizing the funding. If they want a fee increase why not donate to a favorite PSC Commissioners campaign.

I am not claiming the current set of politicians or Senator Balfour in the State of Georgia are nefarious, in fact I’m sure that our current crop of politicians are the most honest and love able people since the introduction of the Smurfs family. But at some point in the future Tony Soprano’s cousin could be elected to the General Assembly and we must keep the system from being corruptable.

I agree with some of the Tea Party remarks. The PSC rarely acts to protect the consumer. But here is another example of the Tea Party wanting to remove regulation for big business. They do not have any intention of replacing it with anything to protect the consumer, instead they want big business to have total, free reign to do carry own without oversight for financial or environmental responsibility to the citizens and consumers.

Sure, pure genius. Let the utilites charge whatever they want. In the dense areas, maybe you get more competition, with wires and pipes crisscrossing all over the place, and the rural areas can be SOL.

The utilities are given monopoly status by statute. It goes back to my previous point. You’d have multiple power lines (with multiple eyesores), multiple gas lines, with multiple crews repairing multiple downed lines in storms and more gas explosions, in the dense areas and nothing in the rural areas.

The PSC does not provide competition. Any energy or telecommunication company that believes they can compete in the State of Georgia will use their own funds to come in.

Any good new idea will be funded by those companies. Right now the consumers fund all the projects the PSC dreams up. Remember they take the profits from these companies, allow them to raise their rates to maintain their margins, and make a competitive FREE zone for the companies they oversee. The PSC enables monopolies, not oversee them.

“Any energy or telecommunication company that believes they can compete in the State of Georgia will use their own funds to come in.”

Energy companies, with or without their own funds, are not allowed to “compete” in the State of GA, it’s the point of the monopoly status. The territory is all divvied up, with a requirement to serve in each territory.